Untitled

whats a fair game

• noone wins and loses in LONG RUN
  • pay 6 rand on a 1 rand bet
    • not gonna get money this way
      • now u keep 50c...and instead of paying R6 for winning, pay R5.50
        • 50c is the house advantage...this makes your profit

win percentage

• total payout for winning no/amout to be bet across all no...times 100= %
  • eg win%= R5.50/R6 X100 = 91.67%
    • remaining 8% is the house advantage
    • for fair game win % is 100 and house advantage is 0

bet on even no. for eg...more likely

• so payout shout be less
  • in fair game you'd payout 2:1...bcz every 2 throws u'd expect a winner
    • every 2 throws, pay 2 pand, win 2 rand
      • NOW ADD HOUSE ADVANTAGE
        • WIN % = 11/12 X 100

SO STALL IS ALL SET

• u have house advantage to make profit (11/12)
  • limit size of bets to prevent stall from folding
    • offer variety of bets

excel spreadsheet using 7 sided die with number 0-6

• fair game
  • probabiliy of win is 1 and prob of loss is 0
    • fair payout is R7
  • if betting on even
    • 3/7 chance of winning...and betting R1
      • so payout is 2 1/3 (reciprocal of 3/7)
        • so payout is amout bet x reciprocal of pr of win
• unfair ...dead zero
  • payout is now R6
    • so expected profit/loss =
      • =-bet amount +(prob of win x payout for win) + (prob of loss x 0)
        • % return on amt bet = expected profit or loss (neg) / amt bet
          • house advantage is % return on amt bet times minus 1
            • bcz what player loses, house gains